Manuel Pellegrini shakes hands with David Sullivan after agreeing a three-year contract.
Photograph: West Ham United FC/West Ham United via Getty Images

West Ham United have appointed Manuel Pellegrini as their new manager after concluding negotiations late on Monday night.

Pellegrini has signed a three-year deal worth up to £7m a year after meeting with David Sullivan, the co-owner, who had promised that the club would make a “high-calibre” appointment after parting company with David Moyes last week.

Newcastle United’s Rafael Benítez was high on the London Stadium club’s four-man shortlist and Sullivan also interviewed Shakhtar Donetsk’s Paulo Fonseca last Monday. Benítez’s contract contained a £6m release clause, however, and Fonseca ended up agreeing a new deal with Shakhtar. Unai Emery, who is set to join Arsenal, proved elusive after leaving Paris Saint-Germain and that made Pellegrini the frontrunner to replace Moyes.

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Claudio Ranieri was also in the running after being dismissed by Nantes but the Italian was always regarded as a risk and that left Pellegrini as the most qualified candidate. The 64-year-old, who won the Premier League with Manchester City in 2014, had spent two years working for Hebei China Fortune and was on £10m a year with the Chinese Super League Club.

West Ham were unsure about agreeing to pay him the same figure but Pellegrini, who has been given full control of transfers, has accepted a lower wage that will still make him one of the most expensive managers in the league. The Chilean flew in from China after leaving Hebei China Fortune over the weekend and will name Rubén Cousillas as his No2. Enzo Maresca will leave Sevilla to join the coaching staff.

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“I think that working all together with the owners, the technical staff and the fans, we have an important power and can think about reaching important targets for the season,” said Pellegrini, who promised to play attacking football.

“I think West Ham has a very good team. I know all of the players and I saw most of the games that they played last season, so I am sure that, with the players we have in this moment in the squad, and bringing maybe another four or five players in, we are going to have a strong team.

“I’m very happy because I return to a league that, for me, and I always say the same thing, is the best league in the world, and especially because I come here to West Ham because every time I spoke with the owner Mister Sullivan, I always had the feeling that he wants me.”

Sullivan said: “It was important that we appointed someone with knowledge and experience of the Premier League, who already has an understanding – not only of the teams and players we face – but of West Ham United and our ambitions.

Manuel Pellegrini won the Premier League title with Manchester City in 2014. Photograph: West Ham United FC/West Ham United via Getty Images

“Manuel brings a reputation for attacking football and getting the best out of his players. We believe he will attract new talent to the London Stadium as well as improving the current squad. Above all, he is a winner, who knows what it takes to succeed at the highest level and is driven to continue that success. Manuel is the first West Ham United manager to have a Premier League title on his CV, and we believe that his experience, quality and proven record of taking teams forward quickly will ensure that he is successful here. We have listened to fans who asked us to be ambitious. We hope they agree it is an exciting appointment.”

West Ham are interested in appointing Málaga’s Mario Husillos as their new head of recruitment. The Argentinian worked with Pellegrini at Málaga. However, Leicester City’s Eduardo Macià is another candidate for a role which has been vacant since Tony Henry was sacked in February.

West Ham, who will need to give Pellegrini funds to strengthen an unbalanced squad, will hope their new manager can give them some stability. Moyes replaced Slaven Bilic as manager in November and saved the club from relegation but the atmosphere was often toxic and supporters aimed protests at the board during the 3-0 home defeat by Burnley in March.